Breaking Rules

Your financial advisor may be breaching rules, regulations and laws with your money.

Inform yourself about how regulators, laws and regulations protect you, your family and your investments.

you should ask questions:

if your financial advisor promised profits on investments and “systems” that will protect you from losses.

If your they told you to borrow money or use the equity in your home, business or farm to invest on your behalf.

If your financial advisor has in any way failed to provide due diligence.

If your financial advisor failed to fully explain the likelihood and potential size of losses you might incur on high-risk investments.

If you believe your financial advisor has not fulfilled a continual obligation to you.

DID YOU KNOW...

KYC

Financial advisors must conduct the KYC (Know Your Client) process meticulously, by interviewing clients to get to know them and their needs, and introducing them to the concepts involved in the investment process. They must make sure they have a sound knowledge of the products or services they recommend, carefully matching specific stocks, bonds, mutual funds or insurance investments to their clients’ needs.

You Pay Fees

When your investments fail, your financial advisor is free to head off to greener pastures, with a pocket full of fees, while your life is in turmoil and your financial security is in tatters.

Risk

The most common problem we see in our work to recover financial losses of investors is the failure of a financial advisor to explain risks in a clear and understandable way. Many advisors will paint a rosy picture of potential returns to the investor, without fully explaining the likelihood of a loss or the potential size of the loss. The fact is that the potential gain in an investment always coincides with the potential loss. In other words, the higher the possible profit, the higher the possible loss and the greater the likelihood of sustaining that loss.

Life Insurance

The beneficiary or the estate does not have to accept the decision of the life insurance company. They can make the claim in court. Or, they can accept the decision, but insist on a return of the premiums. Not the premium for the last year, but all of the premiums from beginning. After all, if the policy was void from the beginning, the payments should never have been accepted. If the insurance company was not at risk to pay the death benefit, it should not be allowed to keep the money that paid for that risk.

Ongoing Relationship

While most financial advisors properly implement the initial steps in a financial strategy, many fail to follow through with the process. Your financial advisor is paid not only to plan the right financial strategy, but also to work with you to ensure that the strategy continues to suit your needs.Once your advisor has established effective communication and made appropriate recommendations specific to your circumstances, you can make informed choices. Once you do so, your advisor must:

keep abreast of changes in products, investment values and market forces that might cause you to suffer avoidable losses

inform you of the benefits and risks of holding and selling investments and purchasing more or alternative investments

continue this process for as long as there is a client-advisor relationship

Due Diligence

Financial advisors are responsible for the advice they give you, and cannot delegate this responsibility to a third party. Due diligence involves performing a service with a certain standard of care and ethics. It commonly applies to a voluntary process, but it can also be a legal obligation. To perform due diligence, your financial advisor must:

thoroughly investigate your needs

carefully research and recommend suitable financial products for you to consider

regularly review your needs and your investments to make sure they remain compatible

*Lawyers licensed by the Law Society of Upper Canada and authorized to practice law in the province of Ontario. The commentaries contained in this website are not intended as legal advice. Readers are warned about relying on communications and should consult a lawyer to be better informed of their rights.